I very often get asked to look at deals on behalf of investors. And I’ll very often get a comment like this: “I think it is a good deal because the operator is offering me a 10% preferred return!” It is understandable why an investor would say something like this, but there are clearly two misunderstandings at play. The first ...
If you’re entering into a partnership agreement with an investment firm, you’re right to do your due diligence on private equity capital calls. Capital calls can happen at any time, which increases your risk for bad deals. However, there are benefits to capital calls, too. In this article, we’ll define capital calls, explain how they work, go over pros and ...
Rising home prices in the U.S. mean many homeowners are sitting on significant equity. Some may need the cash but don’t want to sell their home or move. A number of startups have emerged to give homeowners alternative options to access the capital tied up in their homes. San Diego-based company Splitero offers an unconventional way for homeowners to access ...
To understand common equity, one must first understand how equity and debt differ. Debt, as we all know is money that is provided by a lender that is expected to be returned in full with interest. Equity is an ownership stake in a company or other type of investment. Depending on the type of equity, investors receive a percentage return ...
No matter how prepared an investor can be before buying into a market, there is always a chance of bad luck — or bad timing. There is no guarantee the planets will align themselves to ensure every penny spent is earned back within the expected timeframe, and investors who decide to go with a floating rate are especially at risk. ...
For many real estate investors, securing financing can be a bit of a challenge. Sometimes there are barriers to entry when it comes to traditional bank loans, or investors might need additional financing on top of a bank loan. For this reason, some investors will turn to debt funds, which can often be a safe, alternate method of commercial real ...
In commercial real estate financing, leverage is the result of using borrowed money to fund your investment and generate higher returns on that investment. Leverage is essentially an investment strategy through the use of borrowed money. Commercial real estate investors use leverage to increase their ability to purchase property. A leverage ratio, therefore, is a way to calculate how that ...
When it comes to financing commercial real estate, no one can go to a bank and get the whole bill covered. No matter how great your credit is, there's no bank out there that will fully finance anything — period. There always has to be some downpayment and collateral. But if you're an experienced investor or enter into a joint ...
What You'll Learn What Is Preferred Equity? What Is the Difference Between Preferred and Common Equity? Example of a Preferred Equity Structure in CRE How Is Preferred Equity Used in Commercial Real Estate? 3 Benefits of Preferred Equity Investments We all enjoy preferential treatment, no matter how humble we try to be. As investors, holding a preferred equity position in ...
A home equity loan is a type of consumer debt, allowing homeowners to borrow money against the equity in their home. Other names for a home equity loan include equity loan, home equity installment loan or simply a second mortgage. The loan amount is determined by calculating the difference between the home’s current market value and the homeowner’s remaining mortgage ...
Lev is using technology to transform the CRE financing process.
Lev is using technology to transform the CRE financing process.